Absolutely, Barry. I completely agree with you. Given current economic conditions, your arbitrage scenario is realistic. If the $2k value is firm, the item should not sell below $2k because whoever buys it (auction house or other collector) immediately generates a profit. Given the current state of affairs of falling prices, however, the auction house may need time to unload it at $2k. An auction, by definition, sets the price in a market economy. If the item sells for $1500, that's its true value, not $2k anymore. Sure, given time the buyer may get $2k for it, but again, they assume the risk as it may fall further in price the next time it is offered.
My argument, and I believe sflayanks' point, was more geared toward items where a premium is being bid into the price. If the item in question is valued at $2k and my current, maximum bid is $2k, the auction house runs the risk of purchasing the item above market value if they shill me. They don't know my circumstances nor what premium I place on the item. I may be willing to pay $5k for it (for whatever reason), but why show my hand? I could put in a $5k bid and it goes to that level because the auction house is unscrupulous. I truly don't know if they are or if they're not, but I'm sure as hell not going to believe them simply because they say they're honest. I'd rather bid on the item incrementally, each decision to bid above the item's perceived $2k value is mine, and mine alone. Say it goes back and forth from $2k to $2800. If they are shilling me and its supposed value is only $2k, perhaps they stop there and call it a victory. Sure, I got screwed out of $800 because of illegal shilling, but it's a lot better than paying the full $5k I was willing to spend.
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